Yelp Inc. said it has agreed to acquire Hatch, an artificial intelligence (AI)-powered lead management and customer communication platform, in a deal worth up to $300 million as the review site giant accelerates its AI transformation.
The San Francisco-based company will pay $270 million in cash up front, and another $30 million in employee retention payments to be distributed over two to three years. The transaction is expected to close in early February, pending customary closing conditions, at which point Hatch will become a wholly owned Yelp subsidiary.
Founded in 2018, Hatch has built a platform that centralizes business communications across text, email, voice, and other channels, helping service-oriented companies connect with potential customers more effectively. The platform uses AI to automate responses to incoming leads, enabling businesses to engage prospects within seconds of initial contact.
Hatch’s technology integrates with various lead sources including web forms and lead generators, automating follow-ups throughout the customer journey. The platform’s AI-driven communication agents can handle both inbound and outbound interactions, managing tasks from answering inquiries and booking appointments to screening spam calls and rescheduling services.
The acquisition brings together significant growth momentum with Yelp’s established market presence. As of November, Hatch had achieved approximately $25 million in annual recurring revenue, representing 70% year-over-year growth, while operating at modestly negative cash flow. Prior to the acquisition, Hatch had raised roughly $13.7 million in venture capital from investors including Differential Ventures, Character Technologies Inc., and Tiferes Ventures, according to PitchBook data.
“The acquisition of Hatch is an important step forward in Yelp’s AI transformation, accelerating our strategy to bring powerful new AI tools to local businesses,” Yelp CEO Jeremy Stoppelman said in a statement. He praised Hatch for addressing critical lead management and communication challenges facing service businesses.
Chris Bache, Hatch’s co-founder and CEO, said of the partnership’s potential, “Joining Yelp means we can scale faster and help more businesses grow and succeed.”
The deal represents Yelp’s continued push to expand its software-as-a-service (SaaS) offerings and incorporate AI capabilities that help local businesses operate more efficiently. By combining Yelp’s trusted brand and extensive reach with Hatch’s innovative lead management technology, the companies aim to better serve service providers by navigating the rapidly evolving AI landscape.
